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To: Gary Korn who wrote (3866)	9/10/1999 2:46:00 PM
From: gbh	Read Replies (2) \| Respond to of 10027

Gary, a couple of points on ECN costs: ISLD, the largest of all ECNs (at least for Nasdaq stocks) charges just .0025 cents/share (yes, 1/4 of a cent) to remove liquidity, and they actually rebate .001 cents per share to add liquidity. Other ECNs charge the rates you mention, but they will obviously have to compete with ISLD if they are to survive. From a recent Wired Magazine article (note the article is 6 pages long): The system that Levine, Citron, and Stern put together is shockingly simple in concept and operation. Hundreds of thousands of traders, from individual investors dialing in through Datek Online to professional daytraders using Watcher, have their offers to buy and sell shares represented in what Stern calls "a big list of orders." When the system detects matching orders, it executes them immediately. The cost is very low: Other ECNs generally charge 1.5 to 3 cents a share for executions, while Island pays traders to generate liquidity. People who post quotes that lead to completed transactions are paid one-tenth of a cent per share. Folks who take those offers - whether buying or selling - pay a quarter of a cent per share for the privilege. The system nets Island fifteen-hundredths of a penny on every share traded. It doesn't exactly seem like the Idea That Changed the World. But the low, low prices have very quickly created liquidity, and more significant, they allow individuals to set prices in Nasdaq issues. In effect, the small fry the market makers once disdained are now market makers themselves. wired.com